Paul Ryan Is Back

14 Oct 2013

Paul Ryan’s call for fiscal sanity in early 2010 with his “Roadmap for America’s Future” was a rare voice of reason that periodically emanates from the asylum that masquerades as Congress. That he did so when he was barely 40 says something about his common sense, but a lot more about the older (but less mature) inmates with whom he must deal, including the President.

He is doing so again today, and his voice, I hope, is being heard.

While polls indicate that Republicans have taken most of the heat for the impasse, both sides have proven intractable. Since the President was re-elected in 2012, as were 233 House Republicans, one can argue that both sides are acting out of principled conviction. But, as political commentator Michael Barone recently wrote, “Clear majorities [of those polled] prefer that politicians compromise rather than stick to principles.” In response to a question by CNN/ORC as to whether the participants are acting like “spoiled children,” 69% said Republicans in Congress were and 47% said Mr. Obama was – as Mr. Barone noted, it was a slap at Republicans, but it was also a stunning revelation that almost half of all Americans concluded that a twice-elected President was behaving like a spoiled child, rather than a responsible adult. The never-ending quarreling between Mr. Obama, Mr. Reid and Mr. Boehner reminds me of an admonition from my father when I was growing up: “Never argue with a fool, for a passer-by will be unable to differentiate between the two.”

Paul Ryan, Republican Representative from Wisconsin’s first district and Republican nominee for Vice President in 2012, is known as a policy “wonk.” After losing his bid for Vice President – an event that seems much longer ago than eleven months – his name was expunged from news headlines and the front pages. Paul Ryan is (and always has been) an advocate for a “grand bargain,” which would require major tax and entitlement reform. In an op-ed in last week’s Wall Street Journal, “Here’s How We Can End the Stalemate,” Mr. Ryan laid out his view of the problems facing the country and his suggestions for resolution. He noted that the Congressional Budget Office (CBO) predicts discretionary spending – everything but entitlement programs and interest payments – will grow by 17% or $202 billion over the next ten years. During the same ten years, however, the CBO expects mandatory spending and interest expenses to expand by $1.6 trillion, or 79 percent. According to figures from the Office of Management and Budget (OMB), mandatory spending ten years ago was 55% of the budget and interest expenses were seven percent. Today those numbers are, respectively, sixty percent and six percent. The OMB’s forecast is that ten years from now mandatory expenses will be 64% of the budget and interest costs will be 13 percent.

In his op-ed, Mr. Ryan proposed a middle road. He proposed embracing Mr. Obama’s plans to trim Medicare and Medicaid expenses, and suggested a means test that would have higher-earning seniors pay more for Medicare and to reduce taxpayer support for their Medigap plans. He suggested that federal employees contribute more to their retirement. He wrote of implementing pro-growth reforms that put people back to work, “like opening up America’s vast energy reserves to developments.” But he stressed: “This isn’t a grand bargain.” These are all modest proposals supported by the Bipartisan Policy Center and the Committee for a Responsible Budget. Let us hope they provide a framework for negotiations.

The conversation Mr. Ryan would like to have concerns the long term nature of our political system. Several years ago, Representative Ryan proposed a “Roadmap for America’s Future.” It included such widely acknowledged reforms as means testing for Social Security and raising the retirement age in incremental steps over several years. But it also included more controversial (though not to me) steps, including making people more responsible for their retirement and for reducing dependency on government. In April 2009, President Obama invited the Wisconsin Republican to a speech in which he planned to outline his vision for avoiding what seemed to be an on-coming fiscal/economic Armageddon. The invitation was seen as the extension of an olive branch, a gracious and cooperative presidential response to an individual who had worked hard on trying to bring reform to a difficult, but compelling problem.

Instead, Mr. Obama skewered Mr. Ryan, whom he had placed in the front row just steps from the podium. He mocked Mr. Ryan and his plan, telling his audience it would harm the elderly, the destitute and the chronically ill. The Democratic National Committee (DNC) picked up on the President’s words. A year later the DNC ran one of most mean-spirited and dishonest ads in American political history – depicting a Paul Ryan look-a-like dumping a wheelchair-bound grandmother off a cliff. The ad was despicable; it backfired. Republicans, in 2010, won back the House, picking up 63 House seats, the most for an “out” party since 1938.

Today, more than ever, structural reforms are needed. As Mr. Ryan wrote, “Just as a good investment gets higher returns through compound interest, structural reforms produce greater savings over time.” A sticking point is the phrase “over time.” It is difficult for Attention Deficit Deprived politicians to think beyond the next election, especially about reforms that may take years for savings to be realized.

Last Thursday, the New York Times ran an article by Jonathon Weisman, “Ryan is Again in the Forefront for the G.O.P.” He has emerged, according to Mr. Weisman, “as essential to its rescue.” Mr. Ryan’s new plan, “A Path to Prosperity,” Mr. Weisman wrote, calls for a debt ceiling increase tied to changes to Medicare and Medigap plans, a fast track for the comprehensive simplification of the tax code, and a demand for immediate and structured negotiations with the White House and Democratic Senate. Importantly, the Times reporter noted, Mr. Ryan’s plan made no mention of ObamaCare.

Ideology has reached dangerous levels in Washington. Taking non-negotiable stances, whether by Tea Partiers or the President, is dangerous. However, a stubborn President is far more dangerous to our nation than is a cantankerous junior Senator from Texas. The President is the face of the nation to the rest of the world, and the world’s economy relies on confidence and faith that the United States will honor its commitments, especially those tied to interest payments. Default is not an option. Stocks traded higher on Thursday and Friday as rumors of negotiations circulated, but are slightly lower than they were in early August and mid-September, and less than two percent above where they were in the middle of May. Gridlock over the budget and debt ceiling saw consumer confidence fall 2.2 percentage points last week, to its lowest level since January.

Mr. Obama had said he will not negotiate over the debt ceiling, claiming such negotiations would be “unprecedented.” That is erroneous hyperbole, and he knows it. Mr. Reagan negotiated a debt ceiling with Democrats in 1985 and Bill Clinton did so with Republicans in 1997. In 2006, then Senator Obama railed against raising the debt ceiling. And just two years ago, Mr. Obama negotiated the current debt ceiling with House Republicans when he signed the Budget Control Act of 2011, which ultimately gave us the sequester. Negotiations imply conversations, with each side giving up something. When newspapers like the supposedly responsible Financial Times and the irresponsible New York Times urge the President to stay pat, they do the American people a disservice. In like manner, when media outlets on the right urge Tea Partiers to remain pertinacious, they are in effect telling them to stay pig-headed. Both add gasoline to a combustible situation.

Ultimately, it is the balance between government mandates and individual freedom that is in question. No reasonable conservative believes that government is unimportant. No reasonable Leftist believes that individual rights are not sacrosanct. We would live in a state of chaos, without the modifying influence of government, and we would exist in despotic conditions should are rights be annihilated. We have laws that must be obeyed and rules to which we must adhere, and we must respect those with whom we disagree. Most American libertarians could not survive a state of anarchy, and neither could American leftists survive under Communism. It is the search for the balance between personal responsibility and dependency that fuels these fights, and that is where Mr. Ryan appears – an adult voice amidst a schoolyard of juveniles.

My feelings are well known on this subject. I feel strongly that the path we are on risks leading us toward tyranny. Every time we cede some right to government, we give up some element of freedom. Incrementalism may not hurt until it’s too late. From a monetary perspective, it is not exceeding the debt limit that concerns me; I believe we will resolve that problem. It is the almost inevitable dollar depreciation that I worry about. But I recognize that we must all get along, and that negotiation and compromise are critical to keeping our republic. Is there a point when a tipping point is reached and then breached? At what point will we enter an extended period of rising interest rates? Is there a level of debt that is unsustainable? Is there such a thing as printing too many dollars?

The answer to all four questions is, of course. But I don’t know where the tipping point is, or if we have entered a period of persistently rising rates. I don’t pretend to know what is too much debt or too many dollars. However, these are problems that will have to be faced. In the meantime, as long as our nation has those who are unafraid to disagree with consensus, whether from the Left or the Right and as long as their voices are not stilled, then I believe we are okay.

Mr. Ryan has shown a commonsensical (and civil) way toward compromise. I hope both parties will use it, at least, as a starting point. In his Journal op-ed, Mr. Ryan spoke of his efforts in 2011, with Oregon’s Democratic Senator Ron Wyden, to reform Medicare: “We had different perspectives, but we also had mutual trust. Neither of us had to betray his principles; all we had to do was put prudence ahead of pride.” Mr. Obama, Mr. Reid, and Mr. Boehner – are you listening? Do you care?